Money belongs to the system

Gordon Sanderson

Thursday, 8th November 2018, 6:10 am
Updated Thursday, 8th November 2018, 6:14 am

Oxspring, S36

It is a perverse irony that the new £50 note is to feature a scientist when there is no reputable science in the fantasy world of finance and economics, especially as only 3% of money in the world is physical. The rest is plucked from an imaginary money tree every time commercial banks lend money.

The Bank of England has come out and admitted that 97% of money is created out of thin air every time banks lend it, though this wasn't revealed with any fanfare, or enough clarity to wake up the mainstream media, which continues to keep the public in the dark by daily peddling the same economic orthodoxy which has led to our economic trouble.

Sign up to our daily newsletter

The i newsletter cut through the noise

This Bank of England admission can be seen online in their 2014 report: Money creation in the modern economy. What is not made clear is exactly how this fantasy money is created. One theory is that, effectively, money is created by deceiving the borrower into creating it for the bank by giving the borrower the impression that they are borrowing  the bank's money. They then get the borrower to sign an agreement promising to pay this back to the bank, plus interest. It is the signing of this contract that makes it a type of promissory note, and it is this that becomes the money, worth the value written on it. Without the signing of this agreement, no money is created, so I don't know how banks can argue differently. 

Banks get away with this by placing this so-called money into the account of the borrower, while the bank takes ownership of the money, placing the debt on its own balance sheet. 

So where is money borrowed from? It is borrowed from the future. It is nothing but a promise of future payment that has been given a numerical value. Everybody thinks money is real when it is all debt which is supposed to be circulating back to banks to pay off the debt. When it is paid back, the balance on the bank's balance sheet becomes zero and this imaginary money disappears out of existence. This is admitted in the Bank of England report, though they use the word destroyed.

All that is left is what people did with that money, which means what they did with their life energies - physical, emotional and mental. That is the only economic reality. And what people do with their life energies is create heaven or hell on earth, and it usually ends up being the latter, partly because money is so misunderstood, miscreated and misused on a massive scale.

When the money created/lent is repaid and the balance becomes zero, banks don't make a profit. They therefore charge interest on the loan, which means they are demanding back more money than they are creating. The banking system therefore has to pour more money into the system in the form of debt to get back the loan plus the interest. 

This is a system that can only exist by perpetual debt creation, and lending banks only make a profit by creating debt. When this becomes ever-increasing debt, we are in trouble, as we are when human need, including the need for a sane and sustainable system, is not a priority.

Unfortunately, this economic system is largely about the use of words and images to stimulate and pander to frivolous human dreams, delusions and desires in order to create markets. It's consumerism for the sake of it. And creation, production and growth for the sake of it is what a cancer does. Flooding the world with goods, services and money may create statistics of productivity, but it does not create any form which will house human life in a balanced and sustainable way.

Nowhere in this Bank of England report is any mention of human life and real human need. It's all about how banks stimulate and control consumerism to keep this system going - and bankers making a large profit.

As all money is debt, it could be said that money doesn't belong to the banks that create it or to the hands that grasp it - it belongs to the system, because if the system doesn't work then neither does human life. 

 (I understand this may be too long to print. These are my thoughts on money, which I hope makes sense. I don't claim infallibility, but I didn't create a global financial crisis.)